Worker owned companies are better
Over the course of my career I’ve been privileged to work at some excellent companies. Three of them, Texas Instruments, Andersen Windows, and my current employer Publix all had plans that allowed the employees to own an interest in the company via stock or an ESOT or profit-sharing. These companies shared some common elements.
They were profitable, and high performing. The employees were committed and engaged. The cultures were viewed as enviable. The ownership aspect may not have been the only driver of this success, but it is certainly a major contributor.
When you are an employee AND an owner, it makes the workplace look different. I can attest personally, it makes you think differently about how you treat company resources.
Skin in the game makes you a better player for the team.
I was reminded of this when I saw this headline from the LaCrosse Tribune, Badger Corrugating hands over 40 percent ownership to workers.
Check out why the owner gave nearly half the family to his employees:
ESOPs are an increasingly common tool used by businesses to spur growth, save on taxes and get workers more involved in decision-making, said Mary Jo Werner, a CPA and partner with Wipfli in La Crosse.
The plans serve as an option for retirement savings, giving employees a nest egg to hold and sell when they leave the company. Nearly 10.3 million workers in the United States share ownership in their company through an ESOP, including employees at the La Crosse-based grocer Festival Foods.
A percentage of a business’ profits are not taxed with an ESOP, equal to the percentage of the company owned by workers. Tax savings are reinvested into the company.
Ownership can change a worker’s feelings about the fate of the company, engaging them and inspiring teamwork. That kind of attitude adjustment is another potential boon for ESOP businesses, Werner said.
“If you have a stake in the outcome, if you’re an owner in something, you’ll work a little harder,” Werner said. “Be a little more mindful of what opportunities there are for the company.”
Sounds like pretty good advice. Maybe more companies should look at this strategy in the future. There are plenty of great companies to benchmark against. check out this list of great employers from the National Center for Employee Ownership.